Analog Devices said on Wednesday that it expects second-quarter results to come in ahead of Wall Street forecasts, attributing the strength to sustained demand from industrial customers and data center operators as the artificial intelligence surge boosts semiconductor purchases.
The Wilmington, Massachusetts-based chipmaker set a revenue outlook for the second quarter at $3.5 billion, plus or minus $100 million. That guidance compares with the analysts' average estimate of $3.23 billion, according to LSEG data.
Analog Devices also put forward an adjusted earnings forecast of $2.88 per share, plus or minus $0.15, versus a consensus analyst estimate of $2.31 per share. The company reported first-quarter revenue of $3.16 billion, which exceeded estimates of $3.12 billion.
Management said the ongoing wave of investment in data center infrastructure to support generative AI workloads is helping to counteract a difficult macroeconomic and geopolitical environment by underpinning demand for the firm's semiconductors as hyperscalers expand capacity.
"While the macro and geopolitical backdrop remains challenging, our revenue outlook for the second quarter reflects a new high-watermark for ADI, underscoring our strong execution against cyclical and secular growth tailwinds," Analog Devices CFO Richard Puccio said.
Investors reacted to the company's guidance and results, with shares of the chipmaker rising nearly 8% in premarket trading.
Contextual note: The company's updated guidance and better-than-expected first-quarter revenue highlight the role of industrial demand and data center spending tied to AI workloads in supporting semiconductor sales. Analog Devices' outlook signals confidence in near-term revenue growth despite broader economic and geopolitical headwinds.
Below are key takeaways, sectors affected, and risks explicitly set out in the company's statements and reported data.